WorldatWork Certified Compensation Professional (CCP) C8 Questions & Answers

• Question 31:

  What metric should compensation professionals pay closest attention to for ensuring alignment between the compensation strategy and the HR and business strategies?

  A. Variable pay costs as a percent of total compensation

  B. Total compensation expense for the business, including base pay and variable pay

  C. Reward costs as a percent of total operating costs

  D. The organization's market compa-ratio

  Correct Answer: C

• Question 32:

  The "Value Store" retail company offers its customers low prices and ease of purchase by minimizing waste and striving for high efficiency. What strategy is the "Value Store" using?

  A. Operational excellence

  B. Product/service leadership

  C. Customer intimacy

  D. Brand loyalty

  Correct Answer: A

• Question 33:

  As a general rule, what are individual contributors most likely to ask about their compensation?

  A. What the take-home pay will be

  B. How their pay compares to co-workers

  C. How the company sets compensation budgets

  D. How the company makes pay decisions that affect them

  Correct Answer: D

• Question 34:

  Which of the following is the earnings available to equity owners after paying debt and taxes?

  A. EBIT

  B. EPS

  C. Net income

  D. Operating profit

  Correct Answer: C

• Question 35:

  The Delta Company has experienced increased turnover in the past two years. Data from exit interviews indicate that most of those leaving did so for better opportunities and higher compensation. If Delta pays at the highest percentile of the market for their peer group, what data analysis should they do?

  A. Additional quantitative analysis to determine whether pay rates are truly competitive or existing data are unreliable

  B. Qualitative data collection to talk to key stakeholders and employees and determine whether the exit interviews accurately reflect their concerns

  C. Qualitative data collection in the form of an employee survey with questions about employee satisfaction with pay levels

  D. No additional data analysis is needed. Delta should increase pay rates based on the existing data to decrease turnover.

  Correct Answer: B

• Question 36:

  Regarding presentations to executives, which of the following is most accurate?

  A. Keep them brief

  B. Use multiple media

  C. Include all details related to the issue

  D. Leave backup data out of the presentation so there is time to develop an effective response to unexpected questions

  Correct Answer: A

• Question 37:

  An organization whose focus is on obtaining capital, marketing products or services, sales growth and cash conservation is most likely to be in what stage of the business lifecycle?

  A. Start-up

  B. Growth

  C. Mature

  D. Decline

  Correct Answer: A

• Question 38:

  If employees have a significant impact on the bottom line, what type of pay mix is most appropriate?

  A. A varying mix depending on employee influence on goals to provide the necessary incentive to maximize profits

  B. 100% variable pay to motivate all employees to maximize productivity and sales

  C. 90/10 for the majority of employees (base/variable) to share in the company's success with increased variable pay for management/executives to motivate employees to seek higher positions

  D. High base pay and low variable pay to ensure predictability of total compensation expense

  Correct Answer: A

• Question 39:

  What best describes an effective approach for balancing multiple priorities and perspectives regarding compensation?

  A. Being firm and uncompromising in your decision-making

  B. Representing your view with data and relating it to business results

  C. Finding a compromise that may not appease all stakeholders but does not give any one group or person everything they are seeking

  D. Giving priority to perspectives based on the job or influence level of the stakeholders

  Correct Answer: B

• Question 40:

  What statement is most accurate regarding communication of compensation information?

  A. Compensation professionals should anticipate the level of the audience and tailor messages to their needs.

  B. Compensation terms and practices are unclear to most individuals who do not work in this area and communication should be tailored to the least informed member of the target audience.

  C. The ready availability of information online has made it unnecessary for compensation professionals to tailor messages since individuals can research terms and concepts after the fact if they don't understand a communication.

  D. Compensation terms are well-known and easily understood by most stakeholders.

  Correct Answer: A